The International Monetary Fund (IMF) has been on the scene for more than sixty years.

Its key function has always been preserving international financial stability and for many years that meant sustaining the system of fixed currency exchange rates.

The system was consigned to history by the early 1970s but by the mid 1990s, it was once again obvious what was the main threat to financial stability - a wave of financial crises in major developing countries.

It started in Mexico, there was the Asian crisis, and woes in Russia, Brazil, and Turkey.

Each time the IMF came to fight the financial fires with emergency loans.

Then there was Argentina. A crisis had been staved off with IMF financial support but it all came to a head when the Fund turned off the tap.

'Useful function'

That was nearly six years ago, and since then, there has been no demand for the IMF's fire fighting services.

Indeed some countries that borrowed from it repaid their loans early.

Others, especially in Asia, have built up large reserves of foreign currency to reduce the risk of another crisis and, some say, to reduce the risk of having to go to the IMF again.

It would be very unwise for emerging economies to believe that financial crises have moved up north for ever

Rodrigo de Rato

So is there a need for this role?

Eric Gutierrez of the development group Action Aid is critical of how the IMF has gone about it, but he does think it is a useful function.

It's just that, he says, the IMF expects borrowing countries to continue austerity policies with tight control of public spending when they are no longer necessary - after crisis hit economies have stabilised.

The global economy needs the IMF security, some argue.

But Professor Adam Lerrick of Carnegie Mellon University and the American Enterprise Institute says IMF bail-outs would no longer work.

If it provided loans to stabilise the financial markets of a large emerging economy, such as Brazil, China or India, its resources would be gone in a matter of hours, he says.

'Moral hazard debate

The IMF has a total of $300bn (£150bn) available in total for all intervention, he adds, and that is miniscule compared with the size of international capital markets.

In any event, he thinks, rescue loans would be undesirable even if the IMF had extra resources.

He says a bail-out may be the best solution to whatever is the current crisis, but argues you have to look at how it affects the future.

It changes the expectations of financial market participants who take on more risky transactions in the expectation that there will be a future bailout, Professor Lerrick says.

And this means such bail-outs increase the frequency and severity of future crises.

It is another example of what economists call the "moral hazard" problem which has featured in discussions about central bank loans to help financial institutions affected by the American mortgage crisis.

In a BBC interview, he accepted that there was a ¿moral hazard¿ issue, but it has to be balanced against the benefits of helping countries with serious problems.

He said it has been good for the world economy as a whole that the international community - in the shape of the IMF - has been able to help Mexico, Brazil, Turkey, or for that matter Britain in the 1970s, or his own country Spain in the 1960s.

Encouraging transparency

And what of the suggestion that developing countries, in particular the more advanced ones, don't need the IMF?

After all there has been no big crisis for them since Argentina and they have been largely unscathed by the recent financial storms that started in the US housing market.

He said it would be unwise to suppose that strong and sophisticated financial markets like the US, the UK or Germany can face such a sudden and severe crisis and others never will.

"I wouldn't bet on that", he says. "It would be very unwise for emerging economies to believe that financial crises have moved up north for ever."

But even if they don't want the IMF's loans for now at least, he says the fund can provide advice.

The IMF does put a lot of effort into surveillance, trying to identify financial risks and encouraging countries to publish good reliable economic data, and to do it promptly.

The advice is often controversial. But for encouraging transparency among member countries and looking for risks, the IMF has Adam Lerrick's enthusiastic support.

Financial markets don't like surprises he says. More information reduces that risk.